A Unit Trust can be simply the extension of a typical family Trust or it can be utilised for the benefit of unrelated parties. It is constituted by the vesting of property (usually in the form of cash or investments) in a Trustee who is bound to deal with it in accordance with the terms of the Trust Deed for the benefit of the Unit Holders, whose participation in the Trust is evidenced by the issue of Unit Certificates.

A Unit held under a Trust Deed is fundamentally different from a share in a company. A share is a separate piece of property. A Unit is held subject to the Trusts of the Deed.

A Unit Trust differs from a Discretionary Trust in that in the former case, the property is held upon Trust absolutely for the persons who for the time being are the holders of the Units in the Unit Trust and there is normally no discretion to redistribute the beneficial interests in capital and income among the unit holders.

However a Unit Trust can be engrossed to give the Trustee greater flexibility by creating different classes of units enabling the Trustee to make differing distributions to the holders of the different classes of units (Shelfcom’s standard deed allows for different classes of units to be issued).

Unit Trusts are utilised in the structuring of the ownership of businesses for the following reasons:

• It is a vehicle that gives the capacity of diverse individuals to have a type of relationship as shareholders but has a “pass through” capability for tax purposes, like a partnership.
• Paired with a partnership it gives the partners a capacity to limit their liability to the total net assets of the Trust.

If the Trustee of a Trust is a company then the Trust can be provided also with most of the advantages of company status including perpetual succession (of the Trustee), limited liability so far as the Trustee is concerned etc. The use of a Corporate Trustee also facilitates control over the Trust by giving the means of control over the company, which acts as Trustee, to its Director(s). Generally speaking it is unnecessary for customers to know they are dealing with a Trustee.

Shelfcom, through its legal counsel, is able to establish Unit Trusts on behalf of clients at a cost of $650.00 using our standard deed. Additional costs would be incurred if that Deed was required to be modified. We would be happy to provide potential clients with a quotation beforehand.

Our service includes the following, presented in a three-ring binder: -

• The Trust Deed in Duplicate, as stamped.
• Initial Trustees resolution issuing units and opening bank account.
• Issuing Unit Certificate(s)
• Provision of Application(s) for Units and the Registers of Unit Holders.